In spite of national trends, news of spiking default rates and a prediction of a national decline in retail tenancy, the middle Tennessee region appears to be emerging in equal (or better) condition from one of the most unusual years in history. Prior to the government-mandated shutdowns last year, retail activity in Nashville was at a fever pitch. A decade of year-over-year population and economic growth created a strong seller’s and landlord’s market, with no end in sight. The University of Tennessee’s Boyd Center for Business and Economic Research projected a 1 million-person population growth for Middle Tennessee by 2040. This strong, sustained growth pushed retail rents up more than 50 percent since 2010 and represents one of the largest cumulative increases in the nation, behind only Miami and Austin. In 2019, the Nashville region saw asking rents above the national average, according to CoStar Group. One year ago, the sudden and unexpected COVID-19 shutdowns made the collective hearts of 2008 survivors skip a beat. A real concern of what the next week or month might look like hit both landlords and tenants in the region, particularly in the downtown retail district that is historically reliant on tourism. As music …
MEMPHIS, TENN. — Capstone Apartment Partners has brokered the $8.3 million sale of Shelby Grove Apartments, a 13-building, all-brick apartment community situated on 6.5 acres off at 6357 Shelby Briar Drive in Memphis. Luke Searcy, Austin Heithcock and Adam Klenk of Capstone led the transaction. Sante Realty Investments was the seller, which acquired the asset in 2017. The buyer was EPH Properties. Built in 1999, Shelby Grove includes 98 two-bedroom units and was approximately 94 percent occupied at the time of sale. Each apartment home includes a fully equipped kitchen, ceiling fans and washer/dryer connections. The buyer plans to complete upgrades on 72 remaining unrenovated units by updating appliances, flooring, countertops and fixtures. Shelby Grove is EPH’s first investment in the Memphis market. In total, EPH has invested in more than 1,000 multifamily units and 15 commercial properties in nine markets across the United States.
MEMPHIS, TENN. — DLP Real Estate Capital, a private financial services and real estate investment firm, has acquired Vantage at Germantown, a 288-unit, garden-style apartment community at 7885 Silver Spur Circle, North Dr. in Memphis. The three-story property features one-, two- and three-bedroom units with an average 837 square feet. The sales price was not disclosed, but the seller was Vantage Communities. Built in 2020, Vantage at Germantown sits on over 22 acres and includes a swimming pool with outdoor cabanas and a fireplace, media lounge with internet cafe, clubhouse, 24-hour fitness studio, remote access gates and a bark park. The units feature energy-efficient appliances with full-size washer and dryer, tiled backsplash, closets and personal balconies.
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Multifamily Investors Await Clarity on Nashville’s Economic Recovery
Owners and buyers remain apart on pricing. Unlike some densely populated urban areas where the extent of the damage to local commercial real estate operations is unknown, the gap in Nashville persists due to uncertainty regarding the upside potential rather than downside risks. Owners are hesitant to list properties because the metro remains a safe portion of their portfolios. If this disconnect persists, pricing will return to pre-recession levels before many other areas of the country. In the early months of the COVID-19 pandemic, multifamily transactions slowed to almost a standstill. However, transaction velocity picked back up and made a strong rebound between the third and fourth quarters of 2020. Although total sales volume dropped from $1.9 billion in 2019 to $1.6 billion in 2020, it was still the third-highest sales output since 2010 and cap rates averaged 5 percent, down 28 basis points year-over-year. California-based investors represent the lion’s share of investment activity, purchasing over $650 million of assets in Nashville in 2020. We are seeing more cities buying into Nashville such as Virginia-based Snell Properties, which purchased Retreat at Iron Horse in the Nashville suburb of Franklin for $306,000 per-unit in September. San Antonio-based Embrey developed the Class …
Dalfen Industrial Purchases Land Near Nashville Airport from FedEx, Plans 739,950 SF Industrial Park
NASHVILLE, TENN. — Dalfen Industrial has purchased approximately 76 acres in Nashville, directly east of the Nashville International Airport. Dalfen plans to develop the land into Airpark East, a three-building industrial park totaling 739,950 square feet. Memphis-based FedEx was the seller. Airpark East will be located near Murfreesboro Pike and Interstates 24 and 40. The land is situated in close proximity to the Nashville CBD. Over the last 12 months, Dallas-based Dalfen Industrial has transacted on $1.7 billion of real estate in the United States.
SMYRNA, TENN. — MCR, a hotel owner-operator with offices across the country, has acquired Tru by Hilton Smyrna Nashville and Home2 Suites by Hilton Smyrna Nashville, a dual-branded hotel in the Nashville suburb of Smyrna. The 167-room property is located less than 10 miles from the Nashville Superspeedway, a motor racing complex, and 20 miles from Nashville International Airport and downtown Nashville. The seller and sales price were not disclosed. The Tru by Hilton Smyrna Nashville features 78 pet-friendly guestrooms with refrigerators, a free daily breakfast, 24-hour fitness center, outdoor pool, free Wi-Fi, 24-hour business center with personal pods and remote printing access, 24-hour lobby market with snacks and drinks, onsite laundry and complimentary parking. The Home2 Sutes by Smyrna Nashville features 89 pet-friendly suites with kitchenettes, a free daily breakfast, a 24-hour fitness center, an outdoor pool, free Wi-Fi, a 24-hour business center, onsite laundry and complimentary parking.
CHATTANOOGA, TENN. — CBL Properties, a Chattanooga-based mall owner that declared for Chapter 11 bankruptcy in November, has reached an agreement with its credit facility lenders and unsecured note holders that would eliminate a significant amount of debt, pending bankruptcy court approval. The amended restructuring support agreement (RSA) provides for the elimination of more than $1.6 billion of debt and preferred obligations, as well as a reduction in interest expense. In exchange for their approximately $1.4 billion in principal amount of unsecured notes and $133 million in principal amount of the secured credit facility, noteholders will receive in aggregate $95 million in cash, $555 million of new senior secured notes (of which up to $100 million may be received in the form of new convertible secured notes) and 89 percent in common equity of the newly reorganized company. Existing common and preferred stakeholders in CBL Properties are expected to receive up to 11 percent of common equity in the newly reorganized company. “This agreement is a major step forward for CBL’s restructuring plan,” says Stephen Lebovitz, CEO of CBL Properties. “The plan we are announcing today achieves all of the major objectives we have set for CBL post-emergence, including greater …
In addition to the COVID-19 pandemic in 2020, Nashville weathered tornadoes that traveled through its core in the first quarter and a bomb explosion on 2nd Avenue North in the fourth quarter. Both catastrophes destroyed commercial properties. Despite these events last year, the fundamentals that make Nashville a strong office market remain unchanged. Nashville stays a magnet for corporate relocations, most recently attracting multiple companies from California. According to the Nashville Area Chamber of Commerce data, The Daily Wire, Design Lab, N2M Advisory and Revance Therapeutics announced relocations in the second half of 2020. These announcements encompass over 100,000 square feet of office to be occupied and 540 jobs total. Industry experts surveyed by Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC) for the latest Emerging Trends in Real Estate report ranked Nashville as the No. 3 “Market to Watch in 2021.” This is Nashville’s sixth consecutive year in the top 10. The report credits Nashville’s attractive business climate, affordable cost of living and speed of recovery post-COVID-19. The report names Nashville as one of six new boomtowns as it’s a top in-migration market that is attracting a large share of smart young workers. Additionally, ULI and PwC acknowledge that Nashville …
“When you’re hot, you’re hot.” These old lyrics from Jerry Reed ring loud and clear these days for industrial real estate in Nashville and Middle Tennessee. Over the past five years, Nashville has been on a tear with industrial activity. At the start of 2021, Nashville appears to be pushing the fast forward button, even with COVID-19. There is a growing list of buyers, developers and users looking to enter the Nashville industrial market at unprecedented levels. With that said, can the supply of industrial product and land keep up with the demand? Where will the product be built? And what will it look like? Historically, Nashville has never seen a large supply of speculative big boxes built in comparison to our neighbors such as Memphis and Atlanta. Unless a build-to-suit, larger buildings have had a longer lease-up time in comparison to our neighboring cities. Nashville is a meat and potato market with the vast majority of our deals in the 75,000- to 150,000-square-oot range. Sure, like any market today we have seen our large third-party logistics deals with the likes of Amazon, Geodis and FedEx leading the way. Typically, our market may see one or two of these larger …
NASHVILLE, TENN. — Brookfield Properties has opened the retail and dining component at Fifth + Broadway, a six-acre mixed-use project in downtown Nashville. Brookfield and local developer Pat Emery partnered on the development, which formerly was the location of the Nashville Convention Center. General contractor Skanska broke ground on the project in April 2017, when San Diego-based OliverMcMillan was the lead developer before its acquisition by Brookfield in February 2018. Designed by Gresham Smith and Gensler, the newly opened portion of Fifth + Broadway features 200,000 square feet of restaurants and retail space, along with parking garages that hold 2,145 cars. Retail tenants include Nash Collection, REVV, Ariat, Ray-Ban, Free People, The Dry House, Veseo Lingerie & Swimwear, Molly Green and others. Restaurant tenants include Hattie B’s Hot Chicken, Eddie V’s, Jeni’s Splendid Ice Cream and Shake Shack, among others. The retail center also includes the 56,000-square-foot National Museum of African American Music. Later this spring, Fifth + Broadway’s Assembly Food Hall will debut 15 new eateries dubbed collectively as “South Hall.” The expanded food hall will also include a rooftop concert venue and a full-service restaurant from FB Society (formerly Front Burner Society). Fifth + Broadway also includes The …